Retail companies seeing attrition rate for sales executives drop to 40-45% this year

The development comes at a time when online retail is witnessing a consolidation, cutting costs to reduce losses and some even shutting down.Richa Maheshwari&Prachi Verma | ET Bureau | July 09, 2016, 08:15 IST

The job shifting has reversed too, mainly for delivery boys, many of whom started their career with online companies.BENGALURU|DELHI: The number of people quitting brick and mortar retailers to join online rivals has come down significantly amid ecommerce firms consolidating operations and cutting costs, and many salespeople keen to move back to traditional retailers, say companies and hiring firms.

Attrition rate for sales executives which was as high as about 70-90 per cent last year has almost halved to nearly 40-45 per cent this year, they said. “Good incentives drew many frontline salespeople to startups as delivery boys, a trend that picked up in 2013 and reached its peak two years ago,” said Venkataramana B, president (HR) at Landmark Group that owns Lifestyle and Max chains. “Now the bubble is bursting and they want to come back to a secure job.” Human resource service provider TeamLease said nearly 10,000 delivery persons who had joined online companies are keen to shift back.

Arecruiter who requested not to be identified said attrition rates in retail companies of Tata Group, Reliance Group (Reliance Retail) and Aditya Birla Group are down to 40 per cent this year from 60 per cent about a year ago.

The development comes at a time when online retail is witnessing a consolidation, cutting costs to reduce losses and some even shutting down. For instance, hyperlocal companies such as PepperTap and LocalBanya have shut shop while Grofers has been trimming employee count.

Staffing company Innovsource had 14 clients from the ecommerce space six months ago. This is now down to four companies, with the remaining ten having shut down operations.

Several e-commerce companies are trying to raise funds not necessarily for expanding operations but to keep their existing business afloat.

According to investment bank and securities firm Jefferies Group, fund raising in the Indian ecommerce sector declined 50 per cent in April-June over the same period last fiscal as investors too have become cautious.

Aditya Narayan Mishra, chief executive at CIEL HR Services, said there is higher stickiness of employees for traditional retail companies now. “From junior to the senior levels, people in retail companies are cautious and are no longer job hopping as they were earlier,” he said.

The job shifting has reversed too, mainly for delivery boys, many of whom started their career with online companies. “Over the past few months the number of resumes that we receive has gone up,” said Kaustubh Sonalkar, chief people officer at top retailer Future Group.

“We don't necessarily take them because their skills are different and we have to train them,” he said. According to experts, the retail sector, both organised and unorganised, employs 40 million people, out of which nearly 85 per cent are front-end staff. Kamal Karanth, managing director at staffing firm Kelly Services & KellyOCG India, said the imminent entry of global marquee brands such as Apple and IKEA into single brand retail will present more opportunities to those at front end than ecommerce.

“With the Model 24X7 law being passed, and consumerism on the rise, offline retail will only get a further boost,” Karanth said.

The Union cabinet had last week cleared the Model Shops and Establishment (Regulation of Employment and Condition of Services) Bill 2016 that will allow shops, malls and other establishments to operate 24 hours a day.

Experts said the change in retail attrition is on expected lines as upcoming markets have always impacted retail jobs.

“Over the years retail has faced competition from other industries. First wave was hit when staff were shifting to call centre jobs. Then the second wave was hit when airline industry was at its peak and then some consolidation happened. And the third was ecommerce,” said Kumar Rajagopalan, CEO of Retail Association of India.